Aviation Bankruptcy…

4 min read

Readers of this newsletter series know that we talk a lot about the challenges that will be facing the aviation industry over the coming years and in particular the rest of this decade. This challenge is brought on by the looming economic crisis which many of us believe is already here and is only about to get worse. As we said many times the aviation industry in many ways is fragile and very sensitive to economic shocks.

In this week’s On Aviation™ Digest, we share some stories and articles on recent airline bankruptcies. One of which is the airline that is seeking to come back out of bankruptcy to restart operations. This goes to show that while we may not be paying attention to what’s happening with other airlines, focusing on the major airlines that we are familiar with, challenges are brewing beneath the surface for many airlines. We believe that what we’re seeing here is only the tip of the iceberg of what is to come.

With all that being said, we still believe the aviation industry is quite resilient and will find a way to make it through this challenging time. Whether that means consolidation of the airlines – we are not in favor of this approach since it generally will not benefit the consumer; more airlines going out of business or restructuring; or airlines simply downsizing their operations. None of the above are particularly healthy for growing the industry, yet these things will be important as we enter into challenging times and try to keep the industry alive.

On Aviation™ note: whatever is said above about the airline segment of the aviation industry we can expect to be reflected – in some cases even more pronounced – in the general aviation, and private charter segments.

SAS Scandinavian Airlines To Remain In Bankruptcy Protection Until Next Year

Scandinavian Airlines (SAS) will remain under bankruptcy protection until next year following a New York bankruptcy court order earlier this month. The airline will have until January 8th, 2024, to develop a viable restructuring plan. As reported by ch-aviation, US Bankruptcy Court judge Michael E. Wiles granted a 100-day extension to SAS’ Chapter 11 bankruptcy protection, arguing that the decision was “in the best interests of the debtors, their estates, their creditors, and all parties in interest.” The additional time will give SAS more time to solicit equity and devise a restructuring plan. This is the second extension SAS has been granted following an earlier decision in April. The Scandinavian carrier had initially hoped to exit bankruptcy proceeding this year, but ultimately filed for an extension this summer, giving it exclusivity until January next year. SAS filed for bankruptcy protection in July 2022 and is implementing its ‘SAS FORWARD’ transformation plan, which aims to reduce annual costs by $800 million.

By Luke Bodell | Simple Flying

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Cargo Airline Western Global Files for Bankruptcy to Cut Debt

Western Global Airlines has filed for bankruptcy with a plan to cut its debt after the employee-owned cargo carrier faltered because of headwinds including the weakening global economy and higher costs.

The Estero, Fla.-based company filed for chapter 11 Monday in the U.S. Bankruptcy Court in Wilmington, Del., and said it has a proposed restructuring deal in hand with holders of 85% of its 2025 senior unsecured notes that includes cutting its debt by $450 million. The company’s liabilities include $560 million in loans, a credit facility and notes, according to a sworn declaration by co-Chief Restructuring Officer Robert Del Genio.

Western, which was founded in 2013, has 19 wide-body aircraft and provides services on six continents to governments and commercial customers that include the U.S. Defense Department, the U.S. Postal Service and UPS, according to court records and its website.

By Wall Street Journal

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Cargo Operator Western Global Airlines Files for Bankruptcy Protection

Western Global Airlines, which operates chartered cargo jets for the U.S. military and other customers, on Monday filed for Chapter 11 bankruptcy protection and announced it will restructure with the help of $77 million in financing from creditors, including bondholders with more than 85% of the outstanding senior unsecured notes.

A bankruptcy restructuring has been expected for weeks because of collapsing revenues, a heavy debt load and the decision by credit rating agencies to pull their coverage over the company’s lack of financial transparency. Bloomberg previously reported that Estero, Florida-based Western Global Airlines was arranging debtor-in-possession financing to support ongoing operations under a court-approved bankruptcy plan.

By Eric Kulisch | Flying Magazine

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Bankrupt Monarch Airlines aims to restart operations

The new Morach website features a “coming soon” message and hints at a fresh Monarch experience, using the original logo and iconic Crown emblem.

The company’s updated address near Luton Airport has led to questions about physical office space. While enthusiasts are excited, it’s unclear if the new company has acquired the airline’s assets like intellectual property.

The initiative is led by individuals not widely known in the airline industry. Despite not yet having an Air Operator’s Certificate (AOC), management has expressed intentions to begin operations this year with a fleet of some 15 single-aisle Airbus aircraft.

Monarch’s previous financial troubles were followed by TUI Airways and Jet2.com filling the void, especially after Thomas Cook’s bankruptcy.

By André Orban | Aviation 24

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Note: The views and opinions expressed in the content shared in this digest are for informational purposes only, are solely those of the original content creators, and do not constitute an endorsement by or necessarily represent the views of On Aviation™ or its affiliates.

Thank you for reading this week’s On Aviation™ digest. Do you believe that there are more airline bankruptcies ahead?  Please share your thoughts in the comments below. Remember to check out our On Aviation™ Podcast and continue the conversation on our Twitterand Instagram.

Orlando – On Aviation™

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